Treasury Wine Estates' new leader unveils vision for the UK

Just before Christmas a single bottle of Penfolds Grange 1951 became the most expensive Australian wine ever sold at auction, fetching a cool £44,000. It is interesting to note that the iconic Penfolds brand, beloved of fabulously rich oenophiles, sits in a portfolio alongside Blossom Hill White Zinfandel, the UK’s bestselling rosé. Boosting sales of both brands, positioned at diametrically opposing ends of the market, is the challenge facing Michelle Brampton, who has just taken over from Tom King as managing director for Europe at Treasury Wine Estates.

Also within her remit is the trailblazing 19 Crimes brand, plus Australian heavyweights such as Wolf Blass and Lindemans, but she is keen to talk about luxury wines when DRN meets her at TWE’s office in Twickenham.

“My ambition and focus is to develop into the luxury and fine wine arena,” she says. She notes that TWE has had to focus on “the bread and butter” of the portfolio over the past couple of years, while managing luxury brands such as as Penfolds, Wynns and Beringer Vineyards more tightly, but she is confident in this sector, despite the economic uncertainty currently facing Britain. “In the UK there’s a group of consumers who are passionate about fine wine and luxury, and wine is a proven investment through challenging economic times,” she says.

TWE is analysing routes to market in order to figure out the best way to grow its footprint in the UK’s luxury wine arena, but it is not neglecting its heartland. Blossom Hill seemed a strange fit for a company that prided itself on selling premium wines when it joined the portfolio in 2015. That was a by-product of TWE purchasing Diageo’s Californian wine interests, including Beaulieu Vineyards and Sterling Vineyards, and when the news was announced, chief executive Michael Clarke focused entirely on how the deal was “a game-changer” that would “transform” the firm’s presence in the fast-growing US luxury wine market.

Blossom Hill, previously distributed by Diageo subsidiary Percy Fox, then transferred to TWE’s European team. Since then it has fallen down the list of the UK’s bestselling wine brands after experiencing volume and value decline. It was formerly a top three brand in the off-trade, but Blossom Hill and rival Echo Falls have since been leapfrogged by Barefoot, McGuigan and Yellow Tail. You could view that as TWE either neglecting the brand or struggling to get a grip on it, but Brampton has an interesting point to make about under-bond trading.

“Since we’ve owned it as a company, we’ve stepped away from any under-bond trading,” she says. “It’s to do the right thing for the brand, the right thing for the company and the right thing in terms of HMRC and the regulations in the market. That’s driven quite a significant decline in that brand.”

Reading between the lines, it appears Blossom Hill was previously a key brand for those committing duty fraud and HMRC had earmarked it as a source of concern, so TWE decided to take a hit on sales in order to do the right thing and become best friends with the revenue and customs gang.

Brampton also speaks passionately about the success the company has enjoyed with Blossom Hill, which now sells for 61p a bottle more than Echo Falls and is turning around its sales performance.

Incredible history

“It’s still a big US brand and it’s still the biggest rosé brand, with massive consumer awareness, higher than any other brand at 85%,” she says. “It has an incredible history. It’s back in growth in grocery. It just won a product of the year award with the launch of pale rosé, which is taking the rosé consumer on a journey to a slightly drier style. There’s innovation to keep the brand relevant and I intend us to evolve its position slightly and keep innovating against it.”

Meanwhile, Wolf Blass, Lindemans and 19 Crimes are all flying. “Wolf Blass is doing really well,” says Brampton. “It’s in about 7% MAT growth. Yellow Label is a core range and it will be very visible for us over the summer as a sponsor of the ICC cricket World Cup. There has already been some activation in stores on winning tickets, and there will be lots more of that. It’s got a lot of heritage and credibility in winemaking, and the top end of Wolf Blass plays into that luxury, premium strategy.

“Lindemans has had a brand refresh, which is serving it well and helping it stand out on shelf.

“The stellar performer for us is 19 Crimes. Over the past 12 months it’s been in 200-plus per cent growth, with four times as many sales this Christmas as last Christmas, and 2 million downloads of the living wine label.”

The 19 Crimes brand is aimed at male millennials and uses augmented reality known as “living wine label” to help shoppers discover the story behind every bottle on their smartphones. It focuses on the 19 offences that carried the punishment of transportation to Australia in the 19th century, replete with pictures of grizzled convicts on the labels.

“This innovation appeals to the consumer through the pack, the story and the technology and creates a conversation, but then leaves them to discover a wine they like as well,” says Brampton. “That seems to be really working. The living wine label peaks in downloads at big social occasions, where people are sharing the story and downloading the app.

“We get lots of great feedback on the wine as well. If you can get people into the category with how it looks and fun stuff on the app, you start to convert people into wine. I see people on Facebook saying they didn’t like red wine, but they love this. Once people start to understand the stories, what the 19 crimes were and what happened to 160,000 people, it creates another conversation behind the wines as well.”

Brampton has been with the business since 2002, when she became financial planning controller at Southcorp Wines. Foster’s took over Southcorp in 2006, and she became commercial operations and business development controller at the firm. Treasury Wine Estates was demerged from Foster’s in 2011 and Brampton was promoted to commercial finance director at TWE two years later. She then served as chief finance officer for Europe and became commercial director last year, before being catapulted into the top job at one of the UK’s largest wine suppliers when King left to become chief operating officer for Asia.

She is now arguably the most senior woman in the UK wine trade and she could serve as an inspiration to young women who want to rise to the top of what was historically a male-dominated industry. When asked what advice she would give such young women, she says: “Be tenacious. If the opportunities present themselves, go for it. Be courageous, even if it doesn’t feel that comfortable. Take the opportunities for the experience and the development.”

TWE has been ranked among the top 10 places in Britain to work for women and one of the best places to work in general, and Brampton hopes to foster a culture of collaboration and inclusivity. “For me it’s important that people continue to love coming to work here and feel like they can make a difference every day,” she says.

She takes the helm at a challenging time, as a duty hike on wine has just kicked in – despite beer and spirits being spared as a result of strong lobbying from those industries – and Brexit looms large. But Brampton sees plenty of opportunities in the current market.

“There are clearly opportunities around innovation, younger consumers, creating exciting brands that bring people into the category, signposting, trying to help the consumer navigate the wall of wine, which brands can help to do,” she says. “The challenges are around the tax regime, excise duty, the impact it has on the consumer and the high street, and consolidation and changes within the retailing market itself, and the impact that has on consumer choice. The volatility of it being the world’s biggest import market brings challenges depending on vintages and foreign exchange, and economic impacts present ongoing challenges.

Mitigating impact

“Like any business we would like some certainty. We have been working and planning for the past six to nine months to mitigate any impacts that are likely to come with whatever the Brexit outcome is. We feel we’ve got good plans in place, because the number one priority is continuity of supply, and that’s what we’ve been focused on. We’ve done as much as we can, knowing what we do.”

When asked about the impact of duty and whether the wine trade needs to be better at hammering home to policymakers its economic impact and the number of jobs it supports, she says: “The trade does need to, especially with how significant the import part of the wine business is and the bottling and production that goes on here. But there’s also the impact it has on consumers. Wine is consumers’ favourite drink. Although beer has an impact on pubs, wine not only has an impact on pubs, but in high street restaurant chains that are less profitable today. The consumer is impacted by prices. It ripples through at every level.”

Yet retail standards currently appear high in the multiples when it comes to branded wine, and there is an opportunity to boost sales in impulse, so wine could flourish in the years ahead.

“A lot of the retailers have done a good job of rationalising the ranges and are in a much better spot,” says Brampton. “Also they are focusing on understanding if the range works, so there is less change, which has to be good for everybody in the supply chain. It is easier to shop.

“There’s always more that can be done, whether it’s on food matching or taste profiling, but that’s where brands have a big role to play – in helping signpost consumers to something they know they like, or something that’s a consistent and reliable product. It can either draw consumers in or continue to give them confidence in what they’re buying. We’ve seen own-label start to decline in the past 12 months and brands have grown.

“For convenience, similar to the bigger retailers, it’s simplifying their range, and taking it seriously, because a basket with a bottle of wine in it is double the spend of a basket without a bottle of wine in it. The advantage they have is that they often have chillers, especially near to the tills, so should make the most of that for white, rosé and sparkling for that impulse purchase.”

Going forwards the plan is to ramp up innovation, push into luxury and keep the stable of brands relevant to the modern consumer.

“We will keep innovating and trying to resonate with the stories we tell. With Blossom Hill, talking about friendship and the female collective is a conversation starter as well as just a product.

“We bring genuine innovation to bring new consumers into the category, to activate it through technology, and we have credibility in our brands and our wine.”